The top 20 fastest-rising areas of spending by the public sector

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Montage © Facts4EU.Org 2024

Part II of Facts4EU.Org’s definitive special series on how the public sector is spending our money

In Part I of this special Facts4EU.Org report we looked at the extraordinary total of £1.2 TRILLION pounds being spent by the UK’s public sector each year. Today we identify the Top 20 fastest-growing areas of public expenditure. No.1 on this chart in percentage terms is the policing of ‘immigration and citizenship’, which has exploded to more than nine times the figure seen only five years ago.

The Top 20 fastest-rising areas of public spending might surprise some readers. In order to present a meaningful picture, we have excluded ‘very small’ (below £1bn) areas of expenditure, because small transactions in these relatively insignificant areas can distort the figures. This leaves some extraordinary increases in more significant areas of public spending.

A Brexit Facts4EU.Org Series
The UK's public expenditure

Part I : The UK's public sector spends more than £1.2 trillion a year - and rising
Part II (This report) : The Top 20 fastest-growing areas of public spending
Part III : For the first time ever, the National Audit Office won't sign off the UK's accounts
Part IV : How much are we spending on migrants/welfare/unemployment/policing?
Part V : The public spending exclusively for Scotland, Wales, and Northern Ireland, plus overall summary

Below we present the fastest-rising areas of public spend in percentage terms, followed by the fastest-growing in terms of actual cash.

Brexit Facts4EU.Org Summary

The Top 20 fastest-growing areas of public spending in the financial year 2023/4

Comparing 2023/4 to 5 years earlier – percentage increase

  1. Policing immigration and citizenship : 832.9%
  2. Fuel and energy : 455.5%
  3. Foreign military aid : 429.8%
  4. Social protection - unidentified expenditure : 193.5%
  5. Public debt transactions : 120.8%
  6. Local public transport : 104.0%
  7. Defence R&D : 97.8%
  8. Executive and legislative organs, financial and fiscal affairs, external affairs : 88.0%
  9. Tertiary education : 63.7%
  10. Family benefits, income support, Universal Credit and tax credits : 61.3%
  11. Economic affairs R&D : 61.2%
  12. Social exclusion - unidentified expenditure : 60.7%
  13. Central and other health services : 57.2%
  14. Prisons : 57.0%
  15. Water supply : 54.1%
  16. Local authority housing : 51.2%
  17. General public services - unidentified expenditure : 50.9%
  18. Railways : 47.2%
  19. Street lighting : 42.3%
  20. Personal social services : 39.2%

[Source: HM Treasury, data tables accessed 07 Dec 2024.]

© Brexit Facts4EU.Org 2024 - click to enlarge

The 9-FOLD increase in spending on policing ‘immigration and citizenship’

Across all areas of public sector spending, the overall percentage increase is 16% in real terms over the past five years.

The stand-out figure above is of course the 9-fold increase in public spending on policing ‘immigration and citizenship’. Whilst the amount involved is relatively small amongst overall public expenditure, this is one of the few areas where the costs of immigration are identified. In many other areas these costs seem to have been subsumed within other areas of expenditure. We will be looking at this in a subsequent report in this series of special reports.

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Increases in actual expenditure in £’s bns by the public sector

Next we looked at the largest increases in the amounts being spent by the public sector. Unsurprisingly this produced some very different results.

Brexit Facts4EU.Org Summary

The Top 20 largest increases in £’s bns in areas of public spending

Comparing the latest financial year 2023/4 with 5 years earlier – increase in £’s billions

  1. Medical services : £54.8
  2. Bank of England debt transactions : £34.9
  3. Central government debt interest : £28.6
  4. Pensions : £28.2
  5. Social exclusion' - non-identified expenditure : £24.8
  6. Social exclusion' - Family benefits, income support, Universal Credit and tax credits : £24.3
  7. Incapacity, disability and injury benefits : £13.5
  8. Military defence : £11.2
  9. Social protection' - Personal social services : £10.7
  10. Executive and legislative organs, financial and fiscal affairs, external affairs : £10.5
  11. Secondary education : £10.4
  12. Social protection' - non-identified expenditure : £9.1
  13. Railways : £8.6
  14. Fuel and energy : £5.8
  15. Pre-primary and primary education : £5.4
  16. Family and children : £5.0
  17. Other police services' : £4.4
  18. Policing immigration and citizenship : £4.2
  19. Housing development : £3.8
  20. General economic, commercial and labour affairs : £3.7

[Source: HM Treasury, data tables accessed 07 Dec 2024.]

© Brexit Facts4EU.Org 2024 - click to enlarge

The NHS tops our chart, even if it is not mentioned by name

It will come as little surprise to any reader that ‘medical services’ comes top of our chart for the highest amount of increase in any specific area of public spending. This refers to the NHS but HM Treasury do not refer to the NHS anywhere in their countless data tables. We must therefore assume that this is the major part of the total of £221bn which was spent on ‘Health’ in the financial year 2023/4.

The £54.8bn increase in this area of spend will of course be even higher next year, as a result of the Labour government’s inflation-busting pay settlement with the doctors’ unions.

The rising cost of debt

Readers will also notice that two ‘debt’ items appear in our Top 20 chart, at positions two and three. The first represents the losses on financial transactions. As with immigration and the NHS, this is hard to identify in the official data we have accessed from HM Treasury, but we believe the No.2 item to be the result of the Bank of England’s apparently deliberate policy of selling off its bonds at a loss.

The Rt Hon Sir John Redwood, former Secretary of State, commented on our report

“Facts4EU reveal why we had a bad tax-raising budget. Too many public sector costs are out of control, from debt interest to the runaway nationalised railway.

"Their great list of the biggest rises point straight to the bad management of our debt and the big losses of the Bank of England.

Time to sort this out and spare the taxpayer.”

- The Rt Hon Sir John Redwood, 08 Nov 2024

The No.3 item in our list of the Top 20 largest increases in areas of public spending is more transparent. This is the cost of the interest payments incurred on central government debt. Put simply, if we live beyond our means, there is a price for this. The position is even worse than we have portrayed above. Below is the full picture for what is known as ‘Public debt transactions’ and for the financial year 2023/4 it comprised the following.

Brexit Facts4EU.Org Summary

The £121 BILLION spent on ‘Public Debt’ in the year ended March 2024

  • Central government debt interest : £78.2bn
  • Local government debt interest : £0.9bn
  • Public corporation debt interest : £0.5bn
  • Bank of England : £23.9bn
  • Public sector pensions : £17.4bn
  • TOTAL : £121.1bn

[Source: HM Treasury, data tables accessed 07 Dec 2024.]

Observations

All of the above has to be put in the context of what we are being told is a major dilemma in the public finances. It does seem somewhat incongruous to look at some of the large rises in public sector spending which go unremarked by ministers and then to be told over and over again about a "£22bn black hole" by the Chancellor, Rachel Reeves.

Overall it seems we are looking at a public sector which is spending like there is no tomorrow. If the government is serious about making the UK once again the fastest-growing economy in the G7 (a pledge it now seems to have quietly dropped), then one good place to start would be to reduce the size of the public sector. Why can't Sir Keir Starmer announce a complete freeze on any and all increases in public sector expenditure? In our view he should go further and require all government departments to reduce their spending by at least 5%. In the case of Ed Milliband's Department for Net Zero we would stipulate a 20% reduction.

The massive debt being bequeathed to future generations - and the cost of the Bank of England

One of the biggest areas of concern is the increase in debt interest payments. For £121 billion per year to be heading out the door for no return is little short of a scandal. The worry is that this will only increase, when Rachel Reeves finds that her budget will in fact damage the economy (and therefore her tax receipts) and will result in her borrowing yet more money.

The other obvious target is the Bank of England. Its policy of selling off government bonds at a loss is extraordinary, as we reported on before. We reiterate that Rachel Reeves must put aside her loyalty to her former employer and haul the Governor of the Bank of England into her office.

Coming up...

In our next report in this series we will look at the enormous amount which HM Treasury classifies as "non-identifiable expenditure". Why is it non-identifiable? And if it is, can we please have some?

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[ Sources: HM Treasury | ONS | House of Commons Library ] Politicians and journalists can contact us for details, as ever.

Brexit Facts4EU.Org, Wed 11 Dec 2024

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